3 Shuai is 53 years old and has been asked to accept early retirement from his company. The company offered Shuai three alternative compensation packages to induce Shuai to retire: 1. $170,000 cash payment to be paid immediately. 4 points 2. A 17-year annuity of $18,000 beginning immediately. eBook Print 3. A 10-year annuity of $54,000 beginning on July 1 of the year Shuai reaches age 63 (after 10 years). Required: Determine the present value of each alternative, assuming that Shuai is able to invest funds at a 8% rate. Which alternative should he choose? Note: Round your final answers to nearest whole dollar amount. Use tables, Excel, or a financial calculator. (FV of $1, PV of $1. FVA of $1, PVA of $1. FVAD of $1 and PVAD of $1) References Alternative 1 2 3 Shuai should choose PV
3 Shuai is 53 years old and has been asked to accept early retirement from his company. The company offered Shuai three alternative compensation packages to induce Shuai to retire: 1. $170,000 cash payment to be paid immediately. 4 points 2. A 17-year annuity of $18,000 beginning immediately. eBook Print 3. A 10-year annuity of $54,000 beginning on July 1 of the year Shuai reaches age 63 (after 10 years). Required: Determine the present value of each alternative, assuming that Shuai is able to invest funds at a 8% rate. Which alternative should he choose? Note: Round your final answers to nearest whole dollar amount. Use tables, Excel, or a financial calculator. (FV of $1, PV of $1. FVA of $1, PVA of $1. FVAD of $1 and PVAD of $1) References Alternative 1 2 3 Shuai should choose PV
Chapter3: Income Sources
Section: Chapter Questions
Problem 41P
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Shuai is 53 years old and has been asked to accept early retirement from his company. The company offered Shuai three alternative
compensation packages to induce Shuai to retire:
1. $170,000 cash payment to be paid immediately.
4
points
2. A 17-year annuity of $18,000 beginning immediately.
eBook
Print
3. A 10-year annuity of $54,000 beginning on July 1 of the year Shuai reaches age 63 (after 10 years).
Required:
Determine the present value of each alternative, assuming that Shuai is able to invest funds at a 8% rate. Which alternative should he
choose?
Note: Round your final answers to nearest whole dollar amount. Use tables, Excel, or a financial calculator. (FV of $1, PV of $1. FVA
of $1, PVA of $1. FVAD of $1 and PVAD of $1)
References
Alternative
1
2
3
Shuai should choose
PV
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